10 Jun Resolutions and minutes: What’s the difference and why does it matter for your SMSF?
One of the most important aspects of having a self-managed super fund (SMSF) is ensuring that your reporting obligations are kept up-to-date and compliant. An important aspect of this is documenting all significant meetings and decisions pertaining to your fund. This is a legislative requirement and keeping up-to-date with your reporting obligations for your SMSF will help to ensure that the fund remains compliant.
Minutes should be read carefully before signing and taken seriously, even for Mum and Dad trustees (who often feel they are too small to worry about this sort of documentation). Minutes are an official and legal record, or evidence of actions and decisions made, which can lead to possible legal ramifications if left ambiguous and unclear.
Resolution versus minutes
A minute is a written record of what has happened at a meeting. A resolution is a record of any decisions made at the meeting. Even a sole director must record their resolutions within a minute and sign the document. All meetings of a SMSF’s trustees should be minuted within a timely manner and at a minimum, there should be an annual meeting to review and confirm the investment strategy of the fund.
The minutes of trustee meetings will include details of any resolutions made.
Examples of matters that require a resolution include:
- Establishment of the fund
- Amendment of the fund’s deed
- Change of fund’s name
- Change to the fund’s business location address, postal address or email address
- Adoption of an investment strategy
- Addition of a member
- Opening of a bank account
- Appointment of an administrator (to assist with administrative and compliance functions)
- Appointment of an accountant
- Appointment of an auditor
- Approval of financial statements
- Creation of reserves including contributions reserves
- The winding up of the fund
A key responsibility in SMSF reporting is to ensure minutes are taken of investment decisions. All investment decisions should be in line with the annually reviewed and agreed investment strategy. This is very important for the fund’s trustees, because if you invest the fund’s money in an investment that fails, the other trustees could take action against you for failing to be diligent in your duties. But, through recording all investment decisions in meeting minutes that are signed by other trustees, there is a record to show that the other trustees agreed with the strategy. Minutes must include details about why a particular investment decision was taken and whether all trustees agreed with the decision.
Making sure your minutes and resolutions are compliant
All minutes and resolutions need to be in writing and in English. If they are kept in an electronic format, they must be in a form that the Australian Tax Office can access and understand.
It is vital that the Australian Tax Office is notified of certain changes to your fund in a timely manner. The ATO must be notified within 28 days of changes to the trustees, directors of the corporate trustee, members, contact details, address, or change in fund status.
How long do minutes need to be kept for?
The ATO advises that minutes of trustee meetings and any resolutions should be kept for a minimum of 10 years.
Do you need help ensuring that your SMSF is compliant? We can provide you with independent advice to ensure you are meeting your reporting obligations and protecting the assets of your SMSF. .